Rising interest rates cools off Southern California's red-hot real estate market

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With interest rates rising another .75%, Southern California's once red-hot real estate market has calmed down.

"Every time we'd put an offer in it wouldn't go through because somebody put $50,000 more, $60,000 more," said homeowner Ariana Sipavich. "Our home was probably the ugliest home on the block," she said.

The latest round of interest rate hikes has bumped 30-year-fixed-rate mortgages to about 6% compared to about 3% in December. Real estate agent David Smith said he's had to make price adjustments on his listing in Woodland Hills after 65 days on the market. He added that sellers have to manger their pricing expectations while buyers are in the driver's seat, essentially making it a buyer's market now.

Green said it's unlikely to see home prices bottom out as they did during the Great Recession since borrowing standards are much tighter now.

 

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